suraj.sun writes: AT&T said Tuesday that any Net neutrality plan restricting its ability to engage in "paid prioritization" of network traffic would be harmful and contrary to the fundamental principles of the Internet.

The flap over paid prioritization started a few weeks ago when Free Press, a pro-regulatory advocacy group, sent letters (No. 1 and No. 2) to the FCC dubbing the concept "discriminatory" and claiming it will "only benefit the few content giants that have deep enough pockets to pay for favorable treatment."

In a telephone interview on Tuesday, Free Press research director Derek Turner said that allowing paid prioritization would undercut the entire concept of Net neutrality, which had its previous legal foundation swept away earlier this year when a federal appeals court shot down the FCC's attempt to punish Comcast for temporarily throttling BitTorrent transfers.

Since that ruling, liberal interest groups have been lobbying FCC chairman Julius Genachowski for a new set of regulations.